EXCLUSIVE: GOP TO QUESTION PREVIOUS WARREN TESTIMONY - Rep. Patrick McHenry (R-N.C.), chairman of the House Oversight TARP subcommittee, plans to use his opening statement at today’s CFPB hearing to suggest that Elizabeth Warren may have misled Congress in previous testimony. He will also describe the CFPB as possessing “virtually unchecked” power.

McHenry will say: “Professor Warren testified that the bureau’s role in ongoing mortgage settlement negotiations was limited to ‘advice.’ Since her testimony, however, Congress received evidence that Professor Warren and the bureau were deeply involved in the negotiations. ...The emergence of the bureau’s ‘Settlement Presentation,’ and the fact that Professor Warren has been in dozens of meetings with federal and state officials about these settlements raises concerns about the veracity of her testimony.” http://politi.co/kUE1Sa

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WARREN SAYS OVERSIGHT ROBUST - In her prepared remarks for the hearing, Warren strongly rejects the idea that the CFPB lacks oversight: “In recent weeks, there have been many overblown claims about the nature of the CFPB’s power. ... These claims disregard the limits on the consumer bureau’s authorities and the very meaningful oversight that Congress imposed over its functioning ... I have been told that if you say anything in Washington often enough, it is eventually treated as fact - regardless of whether it is true or false. While making baseless claims might be shrewd tactics for those who want to undermine the Bureau’s work, they are flatly wrong.” Full testimony: http://politi.co/j4ZT1d

TRIAL BALLOON: WARREN FOR SENATE? NYT’s Jennifer Steinhauer and Binyamin Appelbaum float a scenario that might make things easier for everyone involved if Warren decides it’s feasible (and desirable): “Officials in the Democratic Party are wooing ... Warren to run for the Senate against the Massachusetts Republican Scott P. Brown rather than have her continue to set up [the CFPB] ... In seeking to enlist Ms. Warren ... Democrats are taking aim at two birds. They can lay the groundwork for a potential compromise over a different candidate to lead the new agency and, they hope, they can increase their chances of reclaiming Mr. Brown’s seat by sending against him a woman who has won considerable acclaim and popularity among liberals for taking on the financial industry.” http://nyti.ms/jTzPhN

OKLAHOMA BANKER CHANGES TUNE - TPM’s Brian Beutler: “The head of the Oklahoma Banker's Association -- a one-time Elizabeth Warren skeptic who believed she was ‘akin to the Antichrist’ -- is now asking President Obama to provide her a recess appointment” http://bit.ly/mbJkwi

TODAY’S TOP HEADLINE - FT gets the prize for this gem of a front-page teaser: “In the medium term, we’re all doomed. Gideon Rachman, Page 11.” The column is equally great, arguing that one should not criticize doom and gloom columnists for pointing out the fact that everyone and everything is fully and entirely FUBAR, at least in the decaying world of the west. Rachman: http://on.ft.com/mF6Zv2

M.M. LIVE WITH TIM GEITHNER - M.M. will Acela to D.C. this evening to join the great Mike Allen tomorrow morning for the POLITICO Playbook breakfast at the Newseum with Treasury Secretary Tim Geithner. Be great to meet as many M.M. readers in person as possible. We’ll talk debt ceiling, TARP, jobs, trade, tax reform, China, tennis, why the Yankees are better than the Red Sox (that’s for you, Fitzpayne) and whatever else is on your mind. Doors open at 8 a.m. RSVP to playbookbreakfast@politico.com.

MARKETS STABILIZE - Reuters/Singapore: “The dollar held firm on Tuesday and stocks in Asia steadied but the euro remained on the defensive on worries that the euro zone's debt crisis was deepening and could spread to heavyweights such as Spain. Volatile commodity prices also kept investors on edge, with gold firming to a near two-week high as buyers looked to safe-haven assets. ... Standard & Poor's cut its outlook for Italy to ‘negative’ from ‘stable’ on Saturday, while a crushing defeat for Spain's ruling socialists in local elections raised worries about the government's ability to curtail debt.” http://reut.rs/mfGzCM

GOOD TUESDAY MORNING - M.M. (who contrary to popular belief lives in New York, not DC) wonders why the NYT has not yet done an A1 feature explaining why it rains every single blessed day and why Mayor Bloomberg has not yet installed an artificial sun, at least over Manhattan. Feels like a natural Michael Grynbaum piece.

DRIVING THE DAY - CFPB hearing takes place at 2:00 p.m. ... House Financial Services Committee will mark-up (ultimately doomed) legislation to delay implementation of the Dodd-Frank derivatives title ... Vice President Biden’s debt ceiling/deficit reduction talks shift to Capitol Hill with Medicare and Medicaid spending on the agenda but little expectation for any serious breakthroughs. ... Treasury/AIG share sale expected to price late this afternoon after the market closes. Number is likely to be right around the break-even point for Uncle Sugar ...

Commerce Department this morning expected to report that new homes sales remained flat at about 300,000 on an annualized basis. One way to describe such a number would be: “very, very bad.” Another would be: “horrendously awful.” WSJ helpfully notes in “Ahead of the Tape” today that the 323,000 new homes sold last year was just 60 percent of the total for.... wait for it... 1963. ... State and federal regulators plan to meet with reps from the largest banks today to continue to discuss terms of a mortgage servicer settlement. Reuters reports that federal and state officials have rejected an offer of $5 billion from the banks as “woefully inadequate.”

“TBTF” - M.M. hears it was fab. We even got spanked for emailing a source while it was on last night. But we haven’t had a chance to watch it yet. So please, no emails this morning spoiling it by telling us who won. ... Was it Lehman?

BIG IDEA: CAN DEFAULT REALLY BE AVOIDED? - CNNMoney’s Jeanne Sahadi pokes holes in a key piece of the argument made by those who say failing to raise the limit is no big deal: “Many believe Geithner would have the authority to prioritize payments. So he could decide to pay bondholders first ... The law isn't explicit about that, budget experts said. So it's not entirely clear whether Geithner would be able to prioritize payments -- unless Congress passes a law that says he does. But even if he is allowed to prioritize payments, the situation could still be damaging.” http://bit.ly/miCyWs

CONTAGION FEARS SPREAD (LIKE CONTAGION) - FT’s David Oakley in the page one splash: “The euro and the Spanish and Italian bond markets came under pressure ... amid growing investor fears that the problems of Greece are hitting the bigger economies of Europe’s single currency. The euro fell to record lows against the Swiss franc and two-month lows against the dollar, while Spain’s cost of borrowing for 10-year debt rose to highs last seen in September 2000. Italian 10-year bond yields also jumped. Worries over contagion spread to Europe’s equity markets, with stocks in Italy the biggest fallers down 3.3 per cent. Wall Street was affected too with the S&P 500 closing down 1.2 per cent.” http://on.ft.com/kvzxLn

GOP BIGS: FIELD SET - Apparently you go into campaigns with the field you have, not the field you wish you had ... POLITICO’s Mike Allen and Molly Ball: “High-level Republican leaders tell POLITICO that they now believe the top tier of the presidential field is set, and that no major donors or operatives will remain on the sidelines hoping a dream candidate will make a last-minute entry. These leaders calculate that they are better off to accept the Mitch Daniels-less field as it is and not continue to waffle ... [T]he GOP establishment is now convinced that Mitt Romney is the front-runner, and that Tim Pawlenty and Jon Huntsman have a narrow window to determine who will become the stronger alternative - the anti-Mitt in the GOP field.” http://bit.ly/muKYkF

... Investment banks coordinating the sale have so far gotten indications of interest from investors in the U.S. and abroad that cover roughly the whole offering ... Investors are expecting the deal to be priced between $29 and $30 per share, at a discount to the prevailing market price of AIG's stock. The Treasury is aiming to sell above its $28.70 ‘breakeven’ price per share on its 92.1% stake in AIG. Of the 300 million shares on offer, 200 million are being sold by the U.S. government and 100 million shares are to be issued by AIG.” http://on.wsj.com/iJ6PDl

NEW TECH BUBBLE? - Former car czar and banker Steve Rattner in an FT op-ed: “Here we go again. Barely more than a decade since the last internet bubble deflated, valuations for digital businesses are again rocketing skyward. The new frothiness is eerily similar to the last round of irrational exuberance. ... At its valuation of $9bn, LinkedIn trades at 31 times its revenues for the past 12 months and 173 times its cash flow, stunning multiples for an eight-year-old company. ... Applying the same multiple to Facebook’s rumoured revenues would give its far broader business model a value of at least $60bn (more than that of Ford or TimeWarner)” http://on.ft.com/kq73im

GOVS PUSH FOR TRADE - A group of 25 governors from both parties have written to the White House and Hill leadership in support of the pending trade agreements and Trade Adjustment Assistance (TAA). The letter, organized by the U.S. Chamber of Commerce, also calls for renewal of fast-track trade negotiation authority to the President. Letter: http://bit.ly/ksFFF4

LPS KEEPS TANKING - Shares in Lender Processing Services Inc. have been tanking in recent weeks amid lawsuits and regulatory actions suggesting the company made serious errors in helping banks manage foreclosures. From Yves Smith at NakedCapitalism, via Cody Willard’s blog: “Former LPS Employees Allege 30% to 78% Error Rate in Borrower Mortgage Records ... The City of St. Clair Shores Employees’ Retirement System is the lead plaintiff in a class action lawsuit against Lender LPS that was amended and expanded yesterday. The suit is against the company and its three top officers, charging them with violations of Federal securities laws with the intent of inflating the company’s revenues and stock price.” http://bit.ly/m5iXNu

CLIPS AND SAVE: DODD-FRANK GLOSSARY - Bloomberg Government's senior finance policy analyst Cady North is out with ‘Deciphering Dodd-Frank: A Regulatory Glossary’ which discusses and provides a lexicon of new terms, from CAMELS to haircuts to naked swaps. http://bit.ly/kOtlpi

JOHNSON ON HEDGE FUNDS - Absolute Return’s Lawrence Delevingne interviewed Senate Banking Committee Chairman Tim Jonson (D-S.D.): “On the issue of expert networks, regulators should provide additional guidance on any areas of the securities laws and regulations that market participants find to be unclear. ... [On changing carried interest] “I think it’s widely agreed that our tax system is in need of fundamental reform - there’s not much agreement about what that reform will look like, however. What we need is a tax system that encourages private investment and innovation, while also ensuring we have enough money to fund critical programs such as Medicare, Social Security, education, and defense in a fiscally responsible manner.” Full article is behind a pay wall. http://bit.ly/ipEPSr

ALSO FOR YOUR RADAR -

TWITTER BUYS TWEET DECK

- CNNMoney’s Laurie Segall: “Twitter has acquired TweetDeck, an application for organizing the display of tweets, for more than $40 million in a mix of cash and stock ... TweetDeck has been the subject of speculation about deals for months. But the deal was finally closed Monday, the sources said. Twitter has been known to either downplay third-party apps or acquire them. In the past, Twitter has scooped up popular Twitter iPhone app Tweetie, and partnered with photo add-on TwitPic as it launched its new interface.”
http://bit.ly/kn8r43FOREX SCRUTINY DEEPENS - WSJ’s Carrick Mollenkamp and Jean Eaglesham on pg. C1: “Federal securities regulators are taking a deeper look at the role of big banks in executing currency trades for clients. The [SEC] is examining whether two major banks made proper representations to pension-fund clients about how their currency trades would be handled and priced ... The SEC probe, which is examining the currency-trading activities of Bank of New York Mellon Corp. and State Street Corp., marks
a new level of scrutiny by authorities..” http://on.wsj.com/l7l3sl

NY AG EXPANDS MORTGAGE PROBE

- FT’s Kara Scannell and Justin Baer: “The New York state attorney-general’s probe into mortgage practices at large banks has expanded to include Royal Bank of Scotland, UBS, JPMorgan Chase and Deutsche Bank, bringing the number of banks under scrutiny to seven ... Eric Schneiderman, the state’s top lawyer, has sought informal meetings with executives from the four banks as part of the office’s investigation into the securitisation and marketing of mortgage securities ...The meetings are expected to take place over the next few weeks. Previously the state investigators had requested meetings with Morgan Stanley, Goldman Sachs and Bank of America.”
http://on.ft.com/kIwdJs

LAUGH TRACK: SNL ON EUROZONE - “Saturday Night Live” this weekend opened with a brilliant bit on Dominique Strauss Kahn’s first moments at Rikers Island. One M.M. reader, who sent us the link, said the sketch is “not only hilarious, it has a surprisingly sophisticated take on the eurozone. Even comedians get it.” http://bit.ly/j66bFl

*** A message from Morgan Stanley: Turn off the lights when you leave the room. Seal all windows for winter. Close the blinds to keep out summer heat. Sound familiar? These quaint refrains from the 1970s’ energy-efficiency movement have given way to a high-tech, industrial-strength sector focused today on delivering state-of-the-art building materials, equipment and energy management. Much of its growth is fueled by rising global demand for “green buildings” that can yield significant savings at every scale of construction, operations and maintenance. But technological advances in material science, low-cost connected sensors and chips, and advanced software for managing “smart buildings” make up the other side of this story. With residential, commercial and public buildings accounting for an estimated 30% of the world's energy consumption, increased interest can not only help boost corporate bottom lines, but also lower public budgets, stimulate productivity and create jobs. Read more from Morgan Stanley. ***

Authors:

About The Author

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.